Credit where it's due —

Kindle owners—your e-book refunds are coming

After Apple and five publishers were sued for price-fixing, three have settled.

On Saturday, Amazon started e-mailing its Kindle customers, alerting them to a possible credit coming their way courtesy of Hachette, Harper Collins, and Simon & Schuster. The three publishers were pulled into an antitrust suit in April by the Department of Justice, along with two other e-book publishers (Penguin and Macmillan) and Apple, as part of a massive antitrust case that started after the EU began investigating e-book prices. Sixteen states filed their own antitrust suits against the publishers and Apple as well.

"Hachette, Harper Collins, and Simon & Schuster have settled an antitrust lawsuit about e-book prices," Amazon’s notification reads. "Under the proposed settlements, the publishers will provide funds for a credit that will be applied directly to your Amazon.com account. If the Court approves the settlements, the account credit will appear automatically and can be used to purchase Kindle books or print books."

While the settlement still needs to be approved by the court at a hearing on February 8, 2013, Hachette, Harper Collins, and Simon & Schuster have already set up a $69 million fund to pay back customers. According to Amazon, customers can expect a credit in the range of $0.30 to $1.32 for each eligible e-book the customer bought between April 2010 and May 2012 on a Kindle. Customers can also request the credit in the form of a check.

The news of the settlement is in keeping with rumors earlier this year that three publishers were in talks to settle the lawsuits, although it was unclear which of the five were discussing the matter. Apple, Penguin, and Macmillan have not settled with the DoJ and will likely go to trial in 2013.

Amazon is clearly happy with the decision, as it notes at the end of its e-mail, "In addition to the account credit, the settlements impose limitations on the publishers’ ability to set e-book prices. We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future."

A couple corrections: The settlement is for books purchased between April 2010 (not 2012) and May 2012. The settlement covers books bought from the Amazon Kindle store. You do not need to have purchased the book on a Kindle to qualify.

I've had a kindle 2 for a long time, and have yet to add any non-free ebooks to it. Hopefully this will drive the prices down a bit closer to where they should be. It just feels weird being able to get my public domain and similar books on the kindle, then getting a paperback for a buck or two mailed to me.

I think my sweet spot on price is about $5 (USD), any more than that it would have to be something I really want to read badly. This goes for both print and electronic.

The kindle does however make it easy for a friend to send me a promotional copy of their book.

I've had a kindle 2 for a long time, and have yet to add any non-free ebooks to it. Hopefully this will drive the prices down a bit closer to where they should be. It just feels weird being able to get my public domain and similar books on the kindle, then getting a paperback for a buck or two mailed to me.

I think my sweet spot on price is about $5 (USD), any more than that it would have to be something I really want to read badly. This goes for both print and electronic.

If you watch the daily and monthly deals, you can actually get quite a few good Kindle books for under $5. For example, right now you can snag Neil Gaiman's "American Gods" for $3.99, and in the past I've grabbed Kurt Vonnegut novels for $3, and Stephen Ambrose histories for $2. I've actually amassed a pretty decent library of cheap Kindle books. Hopefully, with the settlement of the lawsuit, we'll see a more deals through Amazon, similar to their music store where there's almost ALWAYS something good on sale.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

You haven't been looking very hard, have you? There've been plenty of examples of ebooks costing more than the equivalent paperback, which is just perverse. And when I say examples, I mean I've been browsing Amazon and noticed it in a lot of cases - so not just isolated situations.

An ebook should always be cheaper than the equivalent physical book simply through costs of materials and cost of delivery.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

You seem to have been buying the wrong paperbacks.

The ebook version of Star Wars novels release at $13, which is about 1.5 times the cost of a paperback., and a bit over 2 times the cost of an ebook from Baen, or the same novel a few months in.

It's a bit harder to say generally, but you have to look at the costs of ebook specifically from those publishers, not the general cost of ebooks.

All of the paperback books I've ever bought were around $25 to $35. Most of the eBooks I've bought were between $2 and and $10.

I have never bought the same book on both, so it's hard to say how the price compares. But I see lots of free eBooks and lots for around $2. I have never seen a paperback in a brick and mortar store go for free or anything close to $2, unless it was a secondhand book sold at a garage sale or similar.

Apple says the publishers can choose whatever price they want, and they will take a percentage. I don't understand what is so bad about that. There is no price fixing, all of the publishers are competing with each other. Sure, there are expensive books, but there are expensive physical books too. I just don't buy those ones.

Boskone wrote:

Kevin McKenna wrote:

abhi_beckert wrote:

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

So far, there has been _zero_ evidence of any price collusion and Apple denies all of the accusations against them (while the publishers have either been silent or forked out money to make it go away).

when most folks say "paperback", they mean the mass market little versions that used to cost $5 and now cost 8 or 9 bucks. The paperbacks that are big, or premium looking are another beast.

although the lawyers may have earned something, I would very much like for all of them to also get a hot poker in the ass. if this was part of every settlement, perhaps there would be less litigation (and only litigation that they strongly believed in!).

Refunds coming for Apple iBook purchasers as well, which will apparently be credited back to your iTunes account. Seems annoying it can only be applied to purchases of other books, though. Not a problem for me because I'm constantly buying them anyway, but I imagine some people would rather have cash. Got this email today:

Quote:

Records indicate that you are eligible for a payment from Settlements reached by the State Attorneys General with electronic book publishers Hachette, HarperCollins, and Simon & Schuster. The Settlements resolve an antitrust lawsuit about the price of electronic books. Apple Inc. (“Apple”) has not been sued in this case. It is assisting in providing this notice as a service to its customers.

What the Settlements Provide

The Settlements create a $69 million fund for payments to consumers who purchased qualifying electronic books from April 1, 2010 through May 21, 2012. If the Court approves the Settlements, eligible consumers like you will receive credits to your iTunes account. The credit can be used on any purchases of electronic books. The amount of your payment has been determined based on the qualifying electronic book purchases identified by Apple in your iTunes account.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

You seem to have been buying the wrong paperbacks.

The ebook version of Star Wars novels release at $13, which is about 1.5 times the cost of a paperback., and a bit over 2 times the cost of an ebook from Baen, or the same novel a few months in.

It's a bit harder to say generally, but you have to look at the costs of ebook specifically from those publishers, not the general cost of ebooks.

All of the paperback books I've ever bought were around $25 to $35. Most of the eBooks I've bought were between $2 and and $10.

I have never bought the same book on both, so it's hard to say how the price compares. But I see lots of free eBooks and lots for around $2. I have never seen a paperback in a brick and mortar store go for free or anything close to $2, unless it was a secondhand book sold at a garage sale or similar.

I don't think you're talking about the same paperbacks everyone else is taking about. Standard mass-market paperback price is $5.99. Or was, anyway. Those are the small paperbacks printed on pulp. They have a distinctive smell. Those are what everyone is talking about, not the higher quality library binding and trade paperbacks, which are also "paperback".

The way it has traditionally worked is for publishers to initially release a hardcover version for $20-25. This is for people who want to read the book as soon as it's released and who are willing to pay a premium to do so. Then, after the book had made a certain amount of money, it's released as a mass-market paperback sold for much less.

We would expect to see the same thing with e-books, maybe with a slight discount because of reduced overhead costs. However, that's not what we've seen; in many cases the mass-market e-book costs more than the mass-market paperback. People are unhappy with that.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

It's not when you have so many people filing for a settlement. The more people you have in the settlement, the less payback that a receiving end of that settlement. So, I guess these publishers are counting on very few customers to react to this lawsuit, and then quietly pay whatever fee that's split between them and go on price gouging as usual. They make hundreds of millions of dollars from customers such as us, so why not pay it outwrite and be done with it? No hard feelings, no one is hurt by it. Betcha that's what the publishers want in the end.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

You seem to have been buying the wrong paperbacks.

The ebook version of Star Wars novels release at $13, which is about 1.5 times the cost of a paperback., and a bit over 2 times the cost of an ebook from Baen, or the same novel a few months in.

It's a bit harder to say generally, but you have to look at the costs of ebook specifically from those publishers, not the general cost of ebooks.

All of the paperback books I've ever bought were around $25 to $35. Most of the eBooks I've bought were between $2 and and $10.

I have never bought the same book on both, so it's hard to say how the price compares. But I see lots of free eBooks and lots for around $2. I have never seen a paperback in a brick and mortar store go for free or anything close to $2, unless it was a secondhand book sold at a garage sale or similar.

But to test what you're talking about here is actually incredibly easy to do, go to Amazon, find a random book where the kindle price has a "price set by publish" note underneath it and see Amazon's price for ebook vs paperback. Going through the best seller list on Amazon, the first you hit with both a kindle and book version is Killing Kennedy by everyone's favourite TV personality. Kindle edition is more expensive than the hardcover, because Amazon only gets to set the hardcover price, not the kindle price.

Quote:

Apple says the publishers can choose whatever price they want, and they will take a percentage. I don't understand what is so bad about that. There is no price fixing, all of the publishers are competing with each other. Sure, there are expensive books, but there are expensive physical books too. I just don't buy those ones.

The problem would be how Apple did this and why they did this. The great concern was Amazon selling books below cost and setting a price ceiling that would be difficult to top. Publishers were selling to Amazon and getting exactly what they wanted, so there shouldn't have been a problem with this.

Apple came to an agreement via getting all the publishers to agree to the same terms. And, magically, the price went up as a result. They're not really competing with each other, they don't all have the ability to publish Harry Potter novels, for example. And it's much better for all of them if they come up with a set price and don't go undercutting each other in a race to the bottom, they keep in control of pricing and determining the value of a book.

It's worth noting that the DoJ involvement had nothing to do with agency pricing, it's extremely common and will continue to happen (even in the book world). But ultimately the retailer will get to set their pricing, rather than the publisher.

Quote:

Boskone wrote:

Kevin McKenna wrote:

abhi_beckert wrote:

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

So far, there has been _zero_ evidence of any price collusion and Apple denies all of the accusations against them (while the publishers have either been silent or forked out money to make it go away).

Yes, it was just coincidence that all the publishers in one go changed their way of selling ebooks with everyone and it came at the same time that Apple launched an ebook store with an agreement with all of them. And despite this being beneficial to publishers, they decided to settle rather than fight it. They didn't just fork out money, they are permanently changing their practices.

There are emails between the publishers and Apple saying that at least some of the publishers were worried about the legalities of what they were doing. This case is really a slam dunk. I hope the publishers (and Apple) that refused to settle get bilked for all their worth.

An ebook should always be cheaper than the equivalent physical book simply through costs of materials and cost of delivery.

If the book is simply a 1:1 digital copy of the print book then I can agree in principle, however if the ebook has enhanced content (e.g. embedded multimedia), then that's certainly worth something.

robrob wrote:

Yes, it was just coincidence that all the publishers in one go changed their way of selling ebooks with everyone and it came at the same time that Apple launched an ebook store with an agreement with all of them. And despite this being beneficial to publishers, they decided to settle rather than fight it. They didn't just fork out money, they are permanently changing their practices.

Having a set of standard operating procedures that companies have to follow to do business with you does not equate to collusion, even if all the major players decide to do business with you. Likewise, the companies independently finding out that they were getting a better deal and demanding the same terms from their other distributors is not collusion. It's called accepting the terms to play in the sandbox, and then looking out for your own best interests from there.

An ebook should always be cheaper than the equivalent physical book simply through costs of materials and cost of delivery.[/quote]

No not really.

Most publishers outsource to China for printing and then sea freight it to the various markets. It's a cost, but not that different than the costs of running servers, coding ecommerce sites etc etc.

Secondly, there is no button that auto creates an ePub from InDesign, Word etc. It very very rarely comes across as intended and once you get to complex books like textbooks, it becomes almost a complete redo production wise.

Going straight to ePub would be a different situation and seems like a no brainer to us here at Ars, but the fact remains that digital sales are still a very small portion of overall sales - 5% at the publisher I work for. So going pure digital to save the extra production cost is not an option yet.

.30 - 1.32 per book is actually quite good for a class action style suit... So much of the funds go to the law firms, etc... that it really does not leave much for the consumer...

Not to mention the biggest gain from all of this are the much better e-book pricing that is available now... My wife was shocked when she was looking at her kindle and found all the books under $10, we have not seen pricing like this since before the iBookstore...

Nice, now that we are getting used to DOJ intervening on behalf of companies.. they are effectively deciding the pricing and who gets to be the winner. Consumers who gloat that they got a low price now should actually start to get worried. Though initially it would all look nice, soon DOJ would extend its powers further to decide on what gets sold and who can get into the business etc. which would eventually lower the quality and increase the prices back to the same levels... only DOJ this time would be telling consumers this is the right price and you will have to live it.

Actually all this is not theoretical stuff. This is how things in UK have come to be. Every kind of market pricing is now set by regulators, who stuff consumers here with choices they can have and at what price. Politicians now have extra talking points to claim they can *fix* the pricing of some commodity if he is voted. Bravo way to go. Just need to wait for the next election.

So does this all mean you need to accept the current prices of ebook which you find unacceptable? No.

* You should have refrained from buying them to lower the market demand for them, instead of asking DOJ.* You should have encouraged authors to release in formats you want outside any store so that the author gets the major chunk of revenue. Already there are several articles on the net by authors who claim that Amazon forces them to keep lowering their prices.. you know what will happen eventually? The good authors would flee the amazon market. You will soon have lots of pieces of junk on the Amazon store.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

As a counter-anecdote, I'm a huge Jim Butcher fan and I'm looking forward with bated breath for the release of Cold Days at the end of November.

However, looking at the pricing Hachette is gouging it's Australian customers with an obscenely high Kindle price.

Hardcover: $16.77Kindle: $21.25

Seriously - the ebook is more than the hardcover including shipping?

How is that anything but price gouging?

iTunes has that book on pre order for $A19.99 in the Australian iBooks store.

$A2.25 less than what you quoted from Amazon.

That may well be, but this is a thread about the Kindle pricing. Thanks, and if I had an iPad or iPhone I'd be interested, but as I want the book on the Kindle that I take on the train every day it's somewhat irrelevant.

Edit: Actually, that's very interesting, given that on Amazon it clearly states that the price has been set by the publisher. So, correct me if I'm wrong, but this seems to mean that either Hachette have set a cheaper price for Apple (their fellow accused in the DoJ action) or Apple is selling at a loss.

Nice, now that we are getting used to DOJ intervening on behalf of companies.. they are effectively deciding the pricing and who gets to be the winner. Consumers who gloat that they got a low price now should actually start to get worried. Though initially it would all look nice, soon DOJ would extend its powers further to decide on what gets sold and who can get into the business etc. which would eventually lower the quality and increase the prices back to the same levels... only DOJ this time would be telling consumers this is the right price and you will have to live it.

Actually all this is not theoretical stuff. This is how things in UK have come to be. Every kind of market pricing is now set by regulators, who stuff consumers here with choices they can have and at what price. Politicians now have extra talking points to claim they can *fix* the pricing of some commodity if he is voted. Bravo way to go. Just need to wait for the next election.

So does this all mean you need to accept the current prices of ebook which you find unacceptable? No.

* You should have refrained from buying them to lower the market demand for them, instead of asking DOJ.* You should have encouraged authors to release in formats you want outside any store so that the author gets the major chunk of revenue. Already there are several articles on the net by authors who claim that Amazon forces them to keep lowering their prices.. you know what will happen eventually? The good authors would flee the amazon market. You will soon have lots of pieces of junk on the Amazon store.

What rubbish are you talking about how it is in the UK? Do you have any evidence / links about your assertions?

At the moment it seems like you're the equivalent of a US Tea Party member but I would be interested if your seemingly insane comment actually had anything behind it...

Nice, now that we are getting used to DOJ intervening on behalf of companies.. they are effectively deciding the pricing and who gets to be the winner. Consumers who gloat that they got a low price now should actually start to get worried. Though initially it would all look nice, soon DOJ would extend its powers further to decide on what gets sold and who can get into the business etc. which would eventually lower the quality and increase the prices back to the same levels... only DOJ this time would be telling consumers this is the right price and you will have to live it.

Actually all this is not theoretical stuff. This is how things in UK have come to be. Every kind of market pricing is now set by regulators, who stuff consumers here with choices they can have and at what price. Politicians now have extra talking points to claim they can *fix* the pricing of some commodity if he is voted. Bravo way to go. Just need to wait for the next election.

So does this all mean you need to accept the current prices of ebook which you find unacceptable? No.

* You should have refrained from buying them to lower the market demand for them, instead of asking DOJ.* You should have encouraged authors to release in formats you want outside any store so that the author gets the major chunk of revenue. Already there are several articles on the net by authors who claim that Amazon forces them to keep lowering their prices.. you know what will happen eventually? The good authors would flee the amazon market. You will soon have lots of pieces of junk on the Amazon store.

Have you ever heard of the "Eat the cake and have it too"? You can't have government protection and ever expanding copyright and then collude to increase the prices and lower the competition in the market. You either follow government rules and play according to the rules or not. Can't have it "follow rules that profit you immensely and ignore all that don't" type of deal.

It's not about setting the price. Publishers get to set the price thing was about amazon selling bellow what publishers think it should be. Remember the first online music stores where they tried to take money for convenience and it was almost as expensive as buying a CD that is a physical product plus a lot better quality than a shit compressed mp3?

It is also an injunction that removes further harm and collusion. I, for one, am very glad they did it. I had refused to buy ebooks from the major publishers in the interim and instead acquires some from Baen and Project Gutenberg.

All of this lawyering for a meaningless refund. In the aggregate I guess it may hurt these bastards a bit, but I doubt it.

$69 million is not going to kill a publisher, but it will be noticeable to these not-super-profitable entities. (Although, as noted above, the injunction is the most important part of this settlement.)

And I don't think it's really rational to complain about "meaningless" refunds, since the amounts we're talking about are also pretty meaningless - a few dollars per book at most. Far too little for individuals who were ripped off to bring suit over, but in the aggregate worth tens of millions of dollars to the companies.

So their idea of "price gouging" is between $0.30 and $1.32 per book? That doesn't sound like gouging to me.

I've been buying eBooks for a long time, and I'm perfectly happy with the prices. They're way cheaper than any paperback I ever purchased, and the reading experience is better (IMHO).

As a counter-anecdote, I'm a huge Jim Butcher fan and I'm looking forward with bated breath for the release of Cold Days at the end of November.

However, looking at the pricing Hachette is gouging it's Australian customers with an obscenely high Kindle price.

Hardcover: $16.77Kindle: $21.25

Seriously - the ebook is more than the hardcover including shipping?

How is that anything but price gouging?

And it looks like they're gouging Australians in particular. In the US, the hardcover is $USD 16.77 and the ebook is $USD 14.99, the latter being set by the publisher. The US and Australian dollars are within a couple cents of being at parity, so the hardcover price is pretty much the same both places.